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JSPES, Vol. 47, No. 3-4 (Fall-Winter 2022)
pp. 231-252

Peer-Reviewing the Classics

Gianluca Piero Maria Virgilio
Universidad Católica Sedes Sapientiae

Manuel Ernesto Paz López
Universidad Nacional de Tumbes

Adam Smith (1723-1790) and David Ricardo (1772-1823) are unanimously renowned as the fathers of modern economic theory. Among their many discoveries, one that is mentioned in most international trade books is the undisputed advantage of free trade over autarchic production, where the first author focuses on the Absolute Advantage scenario while the second shows free trade as beneficial to both countries in the otherwise weaker scenario of Comparative Advantage; however, a rigorous analysis fails to confirm the findings of these two great economists, at least with respect to free trade theories. Their arguments look flawed at a theoretical level and also fail when realistic data are filled into the models. The question remains as to whether their reasoning was caused by genuine analysis or whether they were proposing opportunistic theories justifying economic and political goals belonging to imperial Britain of late 18th and early 19th centuries.